Family and finances can be combustible combo

When it comes to family and finances, mixing the two can get complicated and leave loved ones feeling abused.

During recent online discussions, readers asked me to weigh in on financial issues in dealing with family.

Q: I want to gift my car (old, but low miles and well-maintained) to my college-bound cousin. However, how can I let go of my biggest worry: her triflin’ mother. My dad bought his mother a car, and who do we see riding it around town all the time? [It is the mother of the college-bound cousin.] I’m worried that same thing will happen to this gift. I don’t think I’ll be as gracious as my father. Maybe I should just pay for books instead?

A: One thing you have to accept when giving any gift, large or small, is that once it has been presented, you can’t control its use.

Find out what your cousin needs help with the most — a car or books. If it really is a car, share your concerns and your desire to give an automobile that only she will use. You might want to hold on to the title if you are not sure she will abide by your wishes or if you’re concerned she may be pressured by her mother to allow her to use it. But I would require the cousin to get her own insurance.

If you find that your cousin’s mother is using the car, you can then take it back. However, if all that is just too much, help with books. Hopefully your cousin will be grateful for whatever you give.

Q: My mom and sister helped me out with a car loan, and I have been making consistent payments for the last three years. I owe each of them approximately $900 at this point. Last year, I was in an accident and the medical bills have resulted in more than $5,000 in co-pays and deductibles. I also had a loss of pay for the six weeks after the major surgery I needed. I have arranged a payment plan for the medical bills. My mother and sister have offered to help. But I would like to ask that they forgive the car debt instead of giving me money for the medical bills. I have mentioned how hard it has been to manage all of the bills, but they haven’t offered to drop the car payments. I get the impression that they think I am flaky for not fulfilling my obligation to them. I really am frugal. We buy our clothes from yard sales, rarely eat out; our car is 13 years old, etc. I have one child at home going to community college who I support 100 percent financially. Is there a diplomatic way to ask for a six-month break or to change the payment agreement for the car payment? I just feel totally overwhelmed.

A: Tell them just what you told me. Be upfront and honest. There isn’t anything wrong with asking that your loan terms be renegotiated or even forgiven because your financial circumstances have become more difficult. But you have to be prepared for the answer.

If they want you to pay the loans in full as you agreed, that’s what you should do. It could be that they weren’t going to give you as much for the medical debt as what you have left on the personal loans they made.

And consider this. If they want to help with the medical bills, that would be less money you have to pay out. And in turn you can take that savings and apply it to what you owe to your mother and sister.